Skip to main content

tv   Squawk Alley  CNBC  February 1, 2016 11:00am-12:01pm EST

11:00 am
and "squawk alley" is live. ♪ chi good monday morning. thanks for joining us here on "squawk alley." with us as always, john fortt. and ceo john steinberg. good monday to both of you. we'll get to tech news in a second, but first to dominic chu at headquarters. >> we're watching shares of lumber liquidators, the company halted for trading volatility and reopened, up 5%. it was up about 9%, and this after bloomberg headlines saying
11:01 am
that a u.s. judge has accepted a plea agreement with lumber liquidators. right now we don't know exactly what the plea was or what the plea was for in terms of what charges they address. still, the headline was moving the stock, the stock up about 9.5%, right around just 10:54 a.m., halted for volatility, reopened just now about a minute ago, now up by 6.5% on heavier than average volumes, so we will bring you more. right now, trading volatility around lumber liquidators on a bloomberg headline with a u.s. judge. back over to you guys. >> thanks,dom. keep us posted on that. meanwhile, the rest of the markets giving up some of their gains, lower off the lows for the day. twitter shares up sharply. a new report from the information out this morning says mark andreason and silver lake considering some sort of deal for the social network. twitter shares as i mentioned, up this morning.
11:02 am
they were up about 9% in premarket trading. but here with they are story is jessica lessen, cnbc contributor. jessica, give us the gist of this story. >> so valley investors are definitely circling the wagons on twitter. it's been a big topic of conversation over the past week. and i think a lot of different groups are trying to run the numbers, trying to see if there is a deal. as i reported last night, we don't know if these talks are still active. so still who is actively looking. silver lake and andreason horowitz had considered it. but i don't know that they're still looking at a deal. but people are looking at the numbers. if the price goes down, people see a lot of value. i think it's also very important to remember, though, twitter is a tough takeout target. it's got, you know, weak earnings, lots of cash, growth questions. so i don't necessarily think a deal is likely. but with earnings coming up, everyone is talking about it. >> jessica, what's the issue
11:03 am
here with google not just taking it out? everybody is running with your silver lake an dreessen headline. but in your scoop, you say they have been talking to people about twitter. it seems to me, despite the issues you said around takeout, it's cheap. you can take this thing out for sub $20 billion. the revenue $3 billion this year. what is the issue with google not just doing this. >> it's not just the money, john. of it's also what do you do with twitter, right? how would this help google grow its business? i think one area is perhaps messaging. google is very interested in a messaging play to come at facebook. it doesn't have one right now. but i think you have to not just look at the price. but what are you getting when you buy the company? and you're getting, you know, some ad revenue. google already has that. but i think those are the kinds of issues that management is looking at. so i just can't see a big takeout from a google likely at this point. >> jessica, i imagine they would also get some antitrust concerns from people who think that
11:04 am
they're trying to take over the world. but i wonder, the private equity angle of this is the idea that it would be easier to fix what ails twitter in terms of getting that user growth going again, if they get off the quarterly earnings treadmill. and the flip side of that, if they were to go private, how would they incentivize employees? wouldn't that just open up the floodgates and people go to places that seem like they've got a more immediate payout? >> i think the private equity story is really one of whether you can make twitter more profitable. you still have a lot of revenue. analysts are forecasting for 2016 about $3 billion in revenue. so the idea would be, if you can get some of the costs down, maybe by tackling things like infrastructure and just other costs, you can have a pretty profitable business. now that's the thesis. but as you said, there are a lot of questions. twitter has huge employee stock comp. costs, which is one of them. and then there is a question of,
11:05 am
would you do a private deal, would you do a pipe deal? again, people just love to run the numbers. it's really important to say that i don't think there's something that's necessarily close to being done or, you know, imminent. it's all in the questions of the numbers. but i think, you know, the financial players are looking at revenue and earnings. and that's what they're looking at for the potential. >> and normally, jessica, when you see a pipe deal, it's for the purpose of a cash injection, which twitter doesn't necessarily need. the big questions here seem to be around the product. and i would love to get your reaction to a story that ran in the "new yorker" over the weekend. and one of the quotes said, if twitter's real-time feed is its most powerful asset, and it is, it's not difficult to see a futurer in which instagram, facebook or snapchat or peach, yes, i'm citing peach, they obvious ate the need for twitter's offchanging ideas about social interaction. if you're going to do a deal for a company like this, don't you want to make sure that its product has staying power and
11:06 am
that there is a product vision going forward? what is the talk around that, jessica? >> i think that article raised some excellent points. there is no doubt that the model of just a stream of news and information is not the most exciting, engaging, growth product area on the internet today. i mentioned messaging earlier. i think that is a new platform, that is something interesting. and where twitter has a product opportunity. we shouldn't forget, a number of major executives have just left twitter. so this is a company that does need a new product strategy. you cannot ignore the fact, it does have a nice advertising business right now. and so if you're looking at dollars that are going to be shifting from tv to digital, i think you can see a nice story around ad growth at twitter. but, of course, that will only last as long as the engagement the is. i think there are big questions there too. there have been big questions around the product for a long time. this is the tech world. things go out of favor very, very quickly, and twitter is
11:07 am
absolutely vulnerable to that right now. >> jessica, i agree with you on the idea of it being a hassle for google to acquire. i don't think google cares about profitability of something this small. fundamentally, they have no social strategy. there's a trophy of real-time data. they have already had that data. something doesn't make sense to me. i think it has to be government. no other reason why twitter -- google would be worried about the profitability of a $3 billion a year business. >> although, john, the question is, would it go into google, would it go into other bets at this point? >> well, this strikes me as the sort of thing you might want pa char running. but all of that is speculative. >> we're going to talk about google, but first our things to jessica lessin who broke this story. thanks for joining us this morning. >> great to be here. next up, google's parent company, alphabet, set to report earnings after the bell. the earnings split into two segments. first is google, which contains
11:08 am
things like search ads and youtube. the second will include some of google's what it's calling other bets like google ventures, google fiber. and nest. john steinberg, where do you think investors will be focused? >> this is going to be a crazy earnings announcement. what's going to happen is, it's going to come out, what always happens when there is new classifications. there is going to be a lot of confusion around reading that other -- that other bet segment. the algorithms will be all confused when they try to do their trades around parsing the document. and my gut is how it trades at the time of the earnings announcement could be very different when the earnings call comes out. we're looking at a billion and a half dollars of losses. i think if they come in higher, investors will be upset. if they come in lower, there will be a sense of relief. >> they have been estimated to be as high as $5 billion. the losses for the other bets, john. how much will the core business have to cover here? >> i think a lot, and i think a lot of this quarter depends on the magic of ruth poreat, substantial to this point. i hark back to a quote from last
11:09 am
quarter's call, where ruth said, cap x and other bets is expected to increase through next year, as we continue to execute on the growth agenda there, in particular in access and energy, which contains the fiber business, among other efforts. in other words, we're going to be spending more money in areas that aren't making money yet. so given the quarter we just saw from amazon, versus the quarter we saw from facebook, how are investors going to take that? i think top line has a lot to do with it, because facebook's top line growth came in above where the street wanted, investors were willing to take. okay, they're spending more. amazon, not as much. >> does the fact that facebook had such a strong quarter hold any tea leaves we should be reading? >> yes. absolutely. i'm completely in line with john. it's the amazon cost question that will apply to google. it's the facebook top line. and so goes facebook, so goes google. in terms of the top line. when advertisers look at these two companies, your consumer main stays, your staples or your google spending and facebook spending, they go in lockstep.
11:10 am
google is your dr, facebook is your branding and app install ads. it will be a blowout. >> the stock of google is roughly 5% away from the market cap of apple. what's the likelihood for it that we see these two companies leap frog positions for the most valuable company in the world? >> i think it's decently likely. i would also point out, google stock has held up a lot better through this very rough january that we just had than a lot of these other stocks had. you're still trading at levels well above where they were in the fall and certainly in the summer. so it's got some room to go down if investors sense a whiff of disappointment. so it's different from facebook in that way which had room to rebound. >> again, i agree. now we're at 20 times. remember, this company traded as low as 15 times. so not as cheap as it used to be. >> well, it's up about 1% against a negative take today,
11:11 am
of course. its numbers this afternoon could change. steinberg, you're going to stick around. >> for a little bit, yes. >> yes indeed and we're going to check on the markets right now, trading -- let's see. dow is down about a half percent. the s&p, as well. the nasdaq holding up a little bit better than that, down about a third of a percent. shares of tesla falling after morgan stanley's adam jonas cut his price target on the stock on more than $100. the cut comes primarily for the model x and model 3 car sales. and check out shares of facebook in the green, and hitting a new all-time high. facebook is up about 50% over the last year. and another update on lumber liquidator liquidators. dom chu has the latest. >> john, the stock up 15% right now, and about 3 million shares worth of volume. to bring up up to speed on the context behind, this the stock did move on those bloomberg headlines, saying the company was getting ready to or rather a u.s. judge was going to accept a plea agreement that the they had
11:12 am
put in place. just to bring some background on what that plea was, back in october, the company had entered a negotiation, and at least struck a deal with prosecutors and department of justice with regard to charges relating to the illegal importation of wood and false statements made -- alleged false statements made because of that. now this is, again, a settlement that they agreed to back in october of last year. that is now being accepted by a judge. the agreement does include in the original agreement four misdemeanor care -- misdemeanor charges for violations of the federal lacey act and a single felony charge for the entry of goods by means of false statement. so again, we'll bring in more details. for right now, though, it appears as though the lumber liquidators settlement that bloomberg headlines said have been accepted in terms of a plea agreement by a u.s. judge are related to the illegal importation of wood. still waiting to see, john, if there is anything on the front of the formaldehyde wood.
11:13 am
>> we are in the starting blocks of the 2016 election with today's iowa caucus, live on the ground with a political group backed by mark zuckerberg. and a rough month for tech stocks with names like amazon and netflix down more than 15% to start the year. we're going to look at where some of those big names could go from here. and a historically slow month for the ipo market. we'll break down the numbers and look at what comes next. "squawk alley" is back in a moment.
11:14 am
11:15 am
11:16 am
the 2016 elections heating up with the iowa caucuses taking place today. let's bring in cnbc john harwood, live in des moines, iowa this morning. hey, john. >> good morning. you know, it's getting a little rough out on the campaign trail, as bernie sanders, hillary clinton, ted cruz and donald trump sprint toward the finish line. hillary clinton last night at a rally was suggesting that she's more practical and effective than bernie sanders. bernie sanders is urging democrats to dream bigger than hillary clinton offers. and on the republican side, that trump-cruz rhetoric is getting pretty raw right now. take a listen. >> both trump and marco are attacking me. they're attacking me with all their might. and we're drawing contrasts. and the contrasts are clear, and by the way, substantive and policy-based. a vote for marco rubio is a vote for amnesty. and a vote for donald trump is a
11:17 am
vote for obamacare. >> ted cruz is a total liar. i am so against obamacare, i've been saying it for two years in my speeches. i'm going to repeal and replace obamacare. i don't know where he gets this. but he's a liar. >> now, here are the questions that iowa voters are going to answer tonight when they caucus in just a few hours from now. first of all, the question is whether bernie sanders and donald trump, who have had the biggest crowds, the most enthusiasm, can harness that support, turn it out for caucus night. not as easy for a normal election. those caucuses begin at 7:00 tonight. the second question is, whether the clinton and cruz campaign organizations are as good as advertised. whether they can deliver their vote. clinton has got a three-point lead over sanders in the last des moines register poll. donald trump is ahead by five points of ted cruz. but a good organization might be able to erode that advantage. the third question is whether marco rubio, who you just heard donald trump or ted cruz allude to, can speak up into a close
11:18 am
third place or even a spekd place. the register poll had him significantly behind donald trump. but he's hoping to have the kind of finish here that will sling shot him into new hampshire, and really make him the establishment alternative to these two outsiders. trump and cruz, guys. >> thank you, john. and with the iowa caucus just hours away, and candidates vying to draw in new voters, what are some of the leading issues heading into tonight? todd schultz is president of forward.us and joins us now. an interesting dustup that i've noticed over the past few days over ted cruz's charitable giving. is that showing up on the radar at all out there with those core iowa caucus-goers, or is it more about immigration and the issues that you're more focused on? >> we're really focused just on immigration at this point. i think you'll be able to know tonight on some of these other issues. what i can tell you, on the issue of immigration, we have seen in a couple candidates,
11:19 am
trump, ted cruz, rick santorum, for the first time a major party putting forth people who are saying, they're going to round up and deport 11.5 million people. they're going to eliminate high-skilled immigration. and look, that may get you a win or second place in the iowa caucuses. that is a just horrible and fatal position in a general election. and so i'm curious to see what we see tonight versus what we may see in the future. though i don't think people are going to be able to wiggle out of these positions. >> todd, the des moines register said 45% of voters do not have their mind made up. when you think about the yooutce of the iowa caucuses, how predictive can we treat it? >> i think it's important to understand in politics, people tend to look at one election and look at it, and they don't understand the huge demographic differences. the iowa caucuses are going to be between 99 and 99.5% white. look at our general election.
11:20 am
look at the population we have here. you're looking at 28, 29, 30% of a general election is going to be nonwhite. to put that into context, it's 2.5 times what that was 30 years ago. so what made a play at 30% in iowa could be a huge problem elsewhere. what. >> is your core argument around the benefit to technology of the immigrations and specially talented worker visas? what's a core argument you're making to voters around that? >> i think that as a nation historically, an immigration system and a country that welcomes immigrants has been our greatest competitive advantage. that's incredibly true in a global economy. if you look at the role that high school immigrants play in driving invasion and driving manufacturing, 40% of fortune 500 companies started by an immigrant or children of immigrants, half of startups in silicon valley started by one immigrant founder here. for us to thrive in the 21st
11:21 am
century, we need a 21st century immigration system. >> todd, it kind of feels like you're screaming at a wall mere, though. because this anti immigrant rhetoric out of the gop has played so well to the base up to this point. if you look at trump really brought it to a new level. he continues to be in the lead. how do you need to change strategy in order to draw the right kind of attention, your message? >> i'll bring you back to what i said about an iowa caucus electorate. on this question of are we going to round up 11.5 million people? that has 1 in 5 americans in support of it. now, that actually was probably 45% of an iowa caucus electorate. incredibly conservative. so the question to me is not what's going to happen tonight. the question to me is, what's going to happen in a larger primary election or in a general election. and we're incredibly confident at the end of the day the american people are going to reject mass deportation and favor fixing the illegal immigration system, securing the border and giving a pathway to citizenship for the undocumented. >> all right. sounds like jeb bush, though. todd, thanks.
11:22 am
>> take care. up next, this january was an historically slow month for the ipo market. we'll put those numbers in context in just a moment. uesday. one second it's there. then, woosh, it's gone. i swear i saw it swallow seven people. seven. i just wish one of those people could have been mrs. johnson. [dog bark] trust me, we're dealing with a higher intelligence here. ♪ the all-new audi q7 is here. ♪
11:23 am
11:24 am
11:25 am
the u.s. ipo market just posted its slowest january since 2009. it sends a 51-month ipo streak going back to september of 2011. the drought expected to end next week for biotech companies set to go public, despite the fact that the s&p biotech sector is down 9% this year. at least they're going to try and brave it. >> they're going to try. things turning up the last couple weeks, at least last week, giving people a little bit of oxygen to feel like they can make it out. >> although there is an increasing sentiment having a company with a stock trading down is better than being a private company with a preference that kicks in and you lose control of your company. i was watching a twitter conversation with bill gurley and another entrepreneur over the weekend where they were
11:26 am
making that point and going back and forth. so i would not be surprised if it picks back up in the next quarter. >> also, some questions about employee morale with some of these companies doing down rounds or having their investors come out and talk about how bad the market is. it might be better, as you say, john, just to have that currency. >> absolutely. and when you look at all the great technology companies, whether it's netflix or amazon or google, all these companies have had massive trade downs in their stock and gone on to greatness. in a private company, you can never recover from that, because of the employee morale issues, because of the issues the stock struck so low, that even when you refresh, the stocks waiting for liquidity events. >> we'll see how they trade next week. john steinberg, always appreciate it. and stocks taking a trip back in time. the s&p back to levels we first hit in april of 2014. mike santolli is here with us to talk about whether that makes them a good buy. only about, what did you say, 44 times that this has happened? >> yes. >> where is it a good time to buy?
11:27 am
>> since 1928, only 44 times have you basically been trading in the s&p 500 at a level that you reached 21 months before. so it's a very specific querrey here. but yes, it has been a good time to buy, historically, of those 44 times. the market was up a year later, and three years later. all but five of those times. so essentially an 89% win rate. and the amount you were up is right on par with how much you're up on a typical up year, which is about 18% in up years. so it seems like it puts the odds in your favor, and i think honestly, i decided to take a look at it, mostly because as a reminder to people that, yes, you do go back in time when stock prices go down. and also, this particular cycle has been flattening out for a long type. it's not as if we made a real spike peak, it's not like 2007 when we hit a peak level it kind of went down fast from there. and that could be both good and bad. but i do think it makes sense to put the odds in your favor in terms of trying to find a time to kind of add to long-term
11:28 am
positions. >> we've got a big fat asterisk this time because of qe and also because we've got global public companies that we're dealing with in the environment where the dollar is strong and where currencies are hurting. >> without a doubt. and i'm definitely receptive to the idea we have not felt all the pain we're going to feel from those things and the adjustments that we're going to have to make. on the other hand, i look back to the periods when this didn't work, so to speak. and you had the beginning of world war ii, you had the late '40s ahead of another recession in the late '60s or 1970 when you were also ahead of another recession. to me, the call comes down to are we headed for a recession and that will tell you how deep this kind of bare face is going. and i think every time you have one of these market episodes, it always seems like things are different this time. >> citi went through a bare market checklist today. they say there are five reasons to worry. earnings outlook, m & a activity, credit spreads. but there are 13 reasons not to worry. the flattened yield curve, among them. how do you think those should --
11:29 am
>> interesting. i was thinking about that when you were talking about the ipos in january. normally, you do have a big burst of ipos. you normally have a big burst of investor greed toward the top of a bull market. and a lot of those things didn't fall into place this time. i do think they're correct in pointing out that the credit markets are really not being very accommodating right now. so, again, all these cross currents are what we're seeing right now. i mean, the market stabilized a little bit friday and today. but it's honestly -- doesn't feel like it's put the bad days of january behind it just yet. >> well, not going to make it easy for the folks who want to get in that time machine. mike san totaltolli thanks. let's welcome back simon hobbs, counting down to the close in the uk and europe. >> in fact, european markets are rapidly cutting their losses, even as i speak. we have gone lower on what was happening with oil in particular. but we're coming up towards the flat line. i'm hoping i can show a live shot of strasbourg. draghi has not yet spoken, but
11:30 am
we have the prepared remarks in which the president of the european central bank basically reiterates, there will be a march review of qe. as i say, draghi is not there yet. this is a debate on the ecb annual report. he will be there in a moment. but as i say, we have the prepared remarks. he is suggesting the conditions have changed since they recalibrated qe in early december. ecb policy is working, and still flexible. he's reiterating what we got from ben would curry, another member of the bank earlier today when he said the review and possibly a recalibration would be on the cards. what will be interesting is whether he also warns the markets not to get ahead of themselves. another senior member of the european central bank said earlier today the market should be careful not to have unrealistic expectations of what they could deliver march 10 as happened back in december. in the meantime, let's look at the individual stocks moving today. kicking off with the italian
11:31 am
banks, thank you very much. it is clear now that populary and italy and the government is desperate for some sort of merger activity to strengthen the banks. they are going to come through with that, they say within a month. other banks around the eurozone area have been following, as you can see, in the uk. the oil majors are down with what is happening with oil. let's have a look at some of those that certainly stat oil is down, bp in negative territory. and the flip side of that is that the airlines are making gains. ryanair has announced a big buyback of its own stock in the next nine months. and through the session, you've seen these other airlines rise. this is the owner of british airways. partly in reaction, the losses they have had so dramatically at the start of the year. but as we get more from mario draghi, we'll bring it back to you. >> thank you, simon. next, a rough start to the year for tech, but our next guest is bullish on tech.
11:32 am
maybe getting in santolli's time machine. he'll tell us why, in just a moment. at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade. okay, so you launched your bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence
11:33 am
to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest, borrow, lend, transact-wherever-whenever they choose. and we're digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. digital works for banking and financial services. lets talk about how digital works for your business. ♪
11:34 am
i'm morgan brennen. here is your cnbc news update. at this hour, iowa voters will have their say tonight in the first of the nation caucuses. democrats hillary clinton and bernie sanders are locked in a tight race for the republicans, donald trump is ahead but rival ted cruz is not too far behind. the race will likely be decided by turnout and fears of an
11:35 am
impending winter storm could keep some voters home. the world health organization is holding an emergency meeting to combat the zika virus. it could be classified as a public health emergency deserving of global response. the virus is now in 25 countries. a new study finds teens who eat a high fiber diet may lower their risk for breast cancer. harvard researchers found young women who ate 28 grams of fiber a day reduced their risk of breast cancer before menopause by 24%. and in china, the rush is on! tens of thousands of people crowded shanghai's main rail station, making their way home for the lunar new year. more than 2 billion people around the world are expected to take part in the celebrations. in the year of the monkey begins february 8th. and that is your cnbc news update. back to you. >> thank you so much, morgan brenn brennan. the tech sector lagged at the first part of 2016, but what are the technicals telling us about the year ahead? joining us is chief equity
11:36 am
technical strategist at bank of america, merrill lynch. steven, welcome. >> thanks for having me. >> the selling in january was so broad-based it was like there was no regard for technicals whatsoever. now that we're resetting for the month of february, what are you watching? >> well, i mean, watching the short term indicators the market has. what i think we have right now, broader markets speaking is just an oversold bounce within what could be a down trend for last may. so if you look at the short term, technically oversold bouncing, on the s&p, for instance, 1950, maybe 2000. but then i think you've got the watch overbought. it could be risky. technology, though, we like the sector. we are bullish the sector, we think it's leadership. >> so far this year, we're looking at a chart of s&p technology versus the s&p 500. they are basically mirror images of each other. do you expect this pattern to continue? >> you know, being mirror image with the s&p is actually a good thing, considering a lot of sectors have underperformed the
11:37 am
s&p drastically. so, you know, the market took a big hit, right? and this sector, weathered the storm, in line with the s&p. but interestingly, look at software and services. they have been outperforming since the trading range began back last may and july. and they outperformed so far this year. so that's where your leadership is. it's within software and services. >> when we started to see the tech sector get a little bit overheated last year, there was talk that maybe we could be in for a repeat of 2002 or 2008, which we're looking at here on this screen. how much can we break out from where we are currently, or do you expect that we could revisit these levels? >> i don't think we revisit those lows. in fact, what this pattern is, it's a big base, multiyear base. so we had a huge pullback for tech here. built a base over 12 -- >> that's 2001. >> yes, correct, 2001. built a base over 12 years. and this is 2012. tech broke out. one year in advance of the s&p. what that tells me about tech is
11:38 am
its leadership. if the market pulls back further, a risk for 2016, we would use that as an opportunity to increase exposure technology stocks. this is a leadership trend, emerges before the market broke out. >> of course, we know within the technology sector, you have the high-flying growth names, some of the weaker but yield plays within the space. where are you looking within this subgroup for a breakout? >> well, i mean, it's leadership and software and services. that group actually has something a lot of investors consider scarce. it has both yield and it has growth. so that is our leadership sector. we continue to lag software and services from a big picture perspective. so we do believe that that is a good place to be in technology. so, you know, that includes like, you know, a lot of the high-flying names, but also what we call the big uglies. stock that didn't do anything for a long time. but all of a sudden started breaking out. of those are the ones that have good yield. so you've got the growth and the yield. and i think that's the reason why that sec -- that part of
11:39 am
tech is attractive. >> finally, let's look at the philly semis, which the semis have had a lot of fundamental headwin headwinds. support holds, or do you think we could potentially break through? >> this is a sector that looks risky. the market did roll over. a lot of trend indicators are bearish. so if this rallies a little bit and doesn't get past 640, 690, i think the risk is you can break 545. that is a huge level to hold. and if you draw this here, i mean, i don't know if i can even do it, that could be a shoulder, shoulder. this is where it gets fun, right? and there is your head. if i can even do it right. and if you break that neckline, you've got an issue there. >> these are supposed to be human shoulders. >> yes, exactly. a human standing upright. >> creative license, we'll give it to you. >> well, you know, traditional technical pattern has been around for many years. some people consider reliable. we'll see what happens with it. >> we have to get through earnings first, but these are
11:40 am
levels to watch. thank you for joining us today. >> thank you for having me. >> steven set meyer at bank of america, merrill lynch. >> after the economic data, steve liesman is back at headquarters. >> john, lousy data this morning, to further whittle down an already weak quarter. the cnbc rapid update just in. the fourth quarter now tracking 0.5%. that's down .2 what the government reported initially in that first gdp read for the fourth quarter. everybody is in the same line here. here is the data that did it, personal income 0.3% in line with expectations. but consumer spending being unchanged, that was lower. construction spending up just a tenth. ism manufacturing, january data that does not figure into this, does not figure in the gdp, but shows first out of the box the weak data from december carrying over into january, at least in the manufacturing sector, and speaking of the first quarter,
11:41 am
we got our first read of the atlanta fed, the much-followed gdp tracking from atlanta fed, beginning the quarter, tracking at 1.2%. we'll have our first rapid update for the first quarter. that will be tomorrow after vehicle sales, john. >> all right. we'll be looking for that. thanks, steve. and next, shares of facebook making history in a good way today. we'll tell what's going on. first, rick santelli, what's on your mind this morning? >> you know, i'm obviously aware that iowa caucuses occurring -- and the political landscape much different than anybody may have guessed just three or four years ago. but what goes on in iowa could actually have an impact on what's going on with central banks. how? after the break, we'll talk about it.
11:42 am
11:43 am
11:44 am
coming up, the ceo of colony capital. he will join us to discuss real estate, the stock market, china and a whole lot more. he's also the chairman of mere maximum films. to discuss that story, the call of the day on retail and high-end. we're going to speak to the analyst in our call of the day. talking about that story about twitter's future, as well. debate that social media stock coming up, and google's earnings, as well. we'll see you in 15. >> looking forward to that, scott, thanks. now rick santelli with the santelli exchange. rick. >> thanks, john. you know, it wasn't that many years ago that the name charles
11:45 am
prince, chairman, ceo of citi, said a famous line. he says, as long as the music is playing, you have to get up and dance. you know, it's all about central bankers and i'm pretty sure there was a huge amount of benevolence associated with central bankers, whether it's the fomc or what's going on with the ecb in europe or, of course, the bank of japan ministry, finance. but there comes a point where trying to make liquidity in the system jumpstart economies actually turns into something much darker, in my opinion. and that's when the central banking activity actually becomes the impediment, okay? extend and pretend, make insolvent institutions, give them the ability to live, call it the walking dead, if you will. i don't think that's a good thing. and i think that central banks may have crossed the line. now who is going to take the reins from central banks?
11:46 am
central bankers, like many large bureaucracies, at some point, the very existence makes it almost impossible to change policy. you know, ira harris this morning, our kbeft, and off camera we were talking about they have really -- central banks have really placed themselves in a pretty deep hole. how do you get out of a deep hole? and ira said the first thing you have to do is stop digging. so that really gets to the point of negative rates, fomc in an election year. i'm not about politics. some of the things i say have offshoots into the political area or arena. but i really think after this weekend, talking to various friends and relatives, that just have no idea about how much of the world is in negative rates. the impact of negative rates. but to think all of this is going to happen in an election year. obviously, everybody is talking about iowa. i think about iowa a little different. i think the reason you have such an unruly amount of candidates, whether it's bernie on one side or donald on the other, because
11:47 am
many people, in this country are looking to have the reins taken away. whether it's from the administration, whether it's from the central banks, different crowds, different desires. in the end, i think there could be a huge outcome. not only do i think negative rates could be a platform for the election, i think it's going to be part of the splitsville. you know, listen, if bernie gets close, i think you're going to have two people running on the democratic ticket. if donald wins, there is already rumblings that people like michael bloomberg might run. i envision a four-way run. i remember, you know, the days of third parties, whether it was george wallace or per owe. one trying to take the rains away and one trying to cement them in the arms of government, this is going to be one interesting political season. kayla, back to you. >> interesting might be an understatement. rick santelli, thanks. meanwhile, over to bertha coombs at the nas dafor a quick market flash. >> facebook topping $115 a
11:48 am
share, an all-time high. and that also puts its market cap now above that of exxon. roughly about $328 billion. that compares with exxon's value today, dropping to about $315 billion and change, putting it 4% above, making it now the fourth-most valuable company in the s&p 500. back to you. >> all right. thanks so much, bertha. next, despite all the talk about cord-cutting, super bowl ad prices, more expensive than ever. we'll talk about that in the big game itself. but super agent lee steinberg is coming up in a moment.
11:49 am
11:50 am
11:51 am
i hope you're ready for some football because it's super bowl week. will the panthers have a future hall of fame quarterback, peyton manning on sunday. also launched a venture capital in sports tech and entertainment. lee, thanks for joining us. first, give us the temperature of the business right now. the business of sport. what sort of an age are we in? is it a gilded age, or are things troubled? >> it's an age of spectacular growth. the nfl itself is dominating culture and business, 45 million people playing fantasy football, the television ratings show that
11:52 am
the nfl entertainment brand-new stadium and arena with ancillary revenue screens that are amazing. franchise values at an all-time high. when i started, franchises had a value of $16.5 million. today the dallas cowboys are worth $4 billion. so it's extraordinary growth in every sector, and it doesn't seem to have any cap on it yet. >> leigh, we have seen robert cra kraft, jim boeheim, is there any particular industry you're interested now? >> i think that if you look at a film like "concussion," there is new helmetry that can prevent the problem. there are pharmaceuticals. you have apps for the internet that -- and that bring fans closer to sport.
11:53 am
you have sports health products that promote longevity. you have sports theme motion pictures and television shows. you have environmental projects that can be put into stadia and arena. you have new stadia and arena that we can help assist. it's a whole variety of exciting breakthroughs that are popping in sports and entertainment in a variety of ways. new medical breakthroughs. new ways to deliver content, and it's an exciting field, and we think there are amazing opportunities. >> give us your take on these two super bowl quarterbacks. in terms of marketing appeal. peyton manning, we know he's been around for a long time. he kind of has this good guy dorky appeal, if you will. even in the way he markets himself. then you have cam newton, who wore the zebra striped certiver pants. oh, my goodness.
11:54 am
in this week. and is controversial for the way he celebrates in the end zone. where do you see cam newton going marketing wise over the next five, ten years? >> a star will be born. this is the transcendent marketing platform in america. it transcends any kind of sport to get you to the general public. so what's going to happen is this week, you have an infinite number of writers that are all doing stories. this game will be watched by 120 million people, and then coming out of it, there will be -- the celebrity-making machine that consists of magazines, electronic, all interesting personalitieses. cam newton, handsome, telegenic probably the mvp. so peyton manning is america's spokesman. he has about eight endorsements that keep him buick beekts on
11:55 am
television. it's going to be a cam newton world. >> given what you said about this era in sport, why move into investments the way you are now? what kind of opportunity do you see? is it in consumer goods, something else? >> it is in a whole range of products. years ago, i established something called athlete direct. and we put athletes up on the internet, on the website. first time michael jordan, ken griffey jr., troy aikman. and we put a couple hundred thousand dollars into it. it was the first time it had been done. and a couple years later, sold it for $20 million. so the growth and escalation in all these new concepts is explosive. and by picking the right concepts, new ways to bring fans closer to sports. new products that work in the
11:56 am
athletic field, but have application to weekend warriors, the man in the street. you can validate those concepts. and every sports theme, motion picture that's modestly budgeted, based on aspiration, makes money. so this is the field that's got broad application, and medical research is producing new products in newtery suit californias, pharmaceuticals, things you can ingest that make the body more healthy. >> well, you have shown an ability to pick winners in sport. congratulations on the new fund. lee steinberg, thank you so much. >> thank you. up next, another look at twitter, having one of its best days in a long time. we're back in just a moment.
11:57 am
11:58 am
11:59 am
any more "squawk alley" is now on snapchat. we'll show extras and instant content you can't get anywhere else. plus, some behind the scenes snaps. you can take a photo of the qr code on air right now, and our twitter account, also at "squawk alley." you can also get it on our facebook page, and maybe if we're lucky, more tips from john
12:00 pm
fortt. >> yeah, maybe. if it's a good day, you want those tips. on a bad day, not so much. meanwhile, the markets are gaining ground, despite a big drop in oil overnight. with that, we'll send it over to scott wapner and the half. ♪ all right, guys, thanks so much. welcome to "the halftime show." steve weise is here along with john and pete najarian. and with us onset, tom barrett, founder and executive chairman of colony capital and the chairman of mere amaximum films. tapped out is the high end consumer packing it in. one wall street analyst thinks so and is downgrading several stocks today. we speak to him in our call of the day. forgotten fang, may not have the remarkable returns of netflix or amazon, but googles

15 Views

info Stream Only

Uploaded by TV Archive on